Hon Chairperson, hon Minister, hon Deputy Minister, hon Members of Parliament, distinguished guests, ladies and gentlemen and fellow South Africans, even though South African commercial forestry is now fully in private hands with the winding down of SA Forestry Company (Ltd), Safcol, the sector remains an important contributor to gross domestic product and job creation across the country.
As a disciplined force of the left, the ANC seeks to build a national democratic society in which equality evinces itself in a nonracial, nonsexist and uniformly prosperous tapestry. The ANC has a duty to foster economic growth whilst protecting the vulnerable from the vagaries, whims and temperaments of firms and markets. The ANC seeks to ensure that business takes place in an environmentally sustainable manner in order to ensure that prosperity is neither robbed of nonreplenishable natural resources nor burdened with environmental debt.
The primary responsibility of forestry firms as corporate citizens lies with their communities in which they plant, harvest and process their raw material. The firms have a duty to the country, not only in faithfully doing their taxes but also in alleviating the economic burden on the state and supporting the infrastructure development projects of the state.
In this regard, it is important that firms do not only exist to reap profits from selling logs and processing wood for pulp, paper, furniture and building material. The prices of forestry goods are mostly driven by the ever-rising export demands, thus making these goods too expensive for local consumption. These prices have mainly affected the rate of government's projects of building RDP houses as roofing material expenses always far outstrip any other building expense.
It is the irony of our country that those people who are at the coalface of producing consumer goods are the ones who are most unlikely to enjoy their use and benefit from the value added to them. This phenomenon manifests itself in the cruel irony of farmworkers who feed the nation, yet cannot feed their own households. The same is true for forestry workers who work under difficult conditions sawing logs, loading them onto trucks and processing them into pulp, paper and furniture, yet most of them do not own decent houses or furniture. It is not being suggested that workers should be paid through what they produce, but that they should share in the world which they create.
The winding down of Safcol at a time when the demand for building material and furniture was at its zenith is difficult to fathom, as Safcol did not only have a positive balance sheet but was raking in good profits for the government. It would have made better sense for our government, in fact, to expand Safcol than wind it down for closure.
The argument that Safcol made up less than 2% of South Africa's forestry industry fails in view of the fact that when Cabinet decided in 1997 that the state should exit plantation forestry, Safcol had 40% of industrial forests. Even when Safcol was finally wound down, Komatiland Forest had 10% of industrial forests in South Africa, produced 31% of the yield of softwood saw logs in South Africa, contributed 2,5% to the total industry and employed 3,5% of the total human resource of the sector.
The winding down of Safcol has led South Africa into a situation in which the whole forestry industry is in private hands, and with the private sector's main motive for engaging in business being to amass profits, the ever-rising prices of goods in this industry come as no surprise.
In areas in which Safcol had control there remain communities residing in forests, people who used to depend on government for their basic services. In some of these communities, the firms which took over from Safcol are not continuing the legacy of providing these basic services to the people. Instead of creating employment opportunities for community members and securing their welfare, these firms have, in fact, retrenched workers and outsourced some of the key job-creating functions to subcontractors.
The contractors in pursuit of profits have casualised forestry labour and exploited it without affording their workers rights, ensure that their workers receive due benefits or given their workers medical aid benefits in order to have easy access to medical help in the event of occupational injuries, given the precarious conditions of the workers' jobs. At this stage it might be too late for government to increase its footprint in the forestry industry as the proverbial horse has already bolted out of the stable door. However, government has a duty to protect the forest dwellers and workers from extreme poverty and hunger and ensure that the ANC manifesto promise to create jobs and fight poverty becomes a reality even in this sector.
As a result of the land reform process, the transfer of forestry assets and pending afforestation targets to be reached, as specified in the forestry sector transformation charter and which will take place mainly in communal areas, a significant proportion of forested land will be on community land. This situation provides an excellent opportunity for black economic empowerment.
However, there are challenges that need to be addressed in order to continue with sustainable and productive forestry activity. These challenges include skills, capacity, training and extension support and funding. The forestry sector charter identifies the dire shortage of critical scarce and core skills, as well as shortcomings in skills development infrastructure as key constraints to transformational growth. The Minister has just told this House that there are concerted and co- ordinated sector initiatives that will be undertaken to address this challenge.
Tenure security is another major requirement for forestry investment and development. The challenge lies in defining the rights, roles and responsibilities associated with forest use, which are crucial for the poor to receive an equitable share of the benefits from forestry.
At present, great uncertainty exists over the long-term ownership of forest land. It is estimated that 60% of Komatiland forest, 48% of Mondi and 17,5% of Sappi are subject to land claims. The department has adopted a model that will settle the land claims on privately owned plantation areas to remove the uncertainty about the eventual devolution of the benefits accruing to the claims.
The Reconstruction and Development Programme has as its central concept the achievement of sustainable development. It recognises the need to develop an open, internally competitive industrial sector to generate wealth and employment. Within the rural development strategy the forestry sector is identified as an important element in the contribution to better living conditions and economic opportunity.
As a rural-based activity, forestry contributes to rural development and provides employment and economic opportunities to many South Africans. According to the strategic plan, this sector employs 170 000 people and contributes more than R12 billion to the South African economy annually.
The limited supply of timber remains a challenge for the country. It is expected that the demand for timber will increase in future and this occasions the need, according to the department, for increasing the forest base by planting more trees. Furthermore, the Department of Agriculture, Forestry and Fisheries is promoting the afforestation programme to establish new plantations for growth and development purposes.
Most industrial plantations are located where climatic conditions are suitable for afforestation: 41% in Mpumalanga; 37% in KwaZulu-Natal; 11% in the Eastern Cape; 6% in the Western Cape; and 5% in the Northern Cape. However, the high levels of biological diversity in South Africa mean that the conversion of natural land to new uses always involves an environmental impact. Afforestation is no exception.
Plantation forests bring about new employment opportunities and other social benefits. However, because forestry has tended to be an exclusive land use, there are real and perceived social costs involved. In that regard, the economic benefits of industrial forestry need to be balanced against the cost of water resources and the environmental and social impact.